The fierce competition within the Norwegian sporting goods market and the departure of some of its retail members has proven to be too much for MX Sport. From Jan. 1, 2019, the Norwegian voluntary group will be shutting down its operations, leaving all the 75 remaining affiliated stores without a joint purchasing center and without any joint agreements with suppliers.
Headquartered in Stavanger and affiliated until now with Sport 2000 International, MX Sport is owned by Torbjørn Fjelland and his own retail company, Fjelland & Co., which operates 16 sporting goods stores in the southern part of Norway. They will continue to trade under the MX Sport name. The other stores that were affiliated with the group will be released from their ties with MX Sport. In practice, this means that they will have to buy the goods themselves.
In view of the situation, Sport 2000 International has terminated its licensing agreement with MX Sport for the Norwegian market. It is now open for a partnership with another local major player.
In an interview with Sportsbransjen, Fjelland expressed his sorrow and stated that the board's decision was a complex one. For several years, the MX Sport chain had been searching for ways to become more profitable. The issues of outstanding orders and liquidity have been problematic in recent years, and the closure is said to be mainly attributable to the total cost scenario, which makes the chain's operating model unprofitable in the long run.
One recent event that contributed to the difficulties for MX Sport was the pull-out of a retail member with six stores in the area of Bergen in July of 2017. MX Sport cut ties with it by selling its 50 percent stake in the operation to its other shareholder, Invent Sport, which also owns a successful chain of factory outlet stores, Sport Outlet.
Invent has since relaunched the six former MX Sport stores in Bergen by forming a new chain called Sport Norge, with annual sales of roughly 150 million Norwegian kroner (€15.9m-$18.3m). At the same time, it has expanded the Sport Outlet format to a total of about 35 points of sales including a prominent store of around 2,000 square meters in downtown Oslo.
Meanwhile, the competition in the Norwegian sports market has intensified, especially because of XXL Sport's steady progress and the strong development of pure internet players, which grabbed an estimated 10 percent of the total sporting goods market last year, according to Sportsbransjen, the Norwegian sporting goods industry association.
According to our latest retail chart, which is slightly different from that of Sportsbransjen, XXL grew by 14.5 percent in 2016, reaching a market share of 26 percent. MX Sport had a market share of only 5 percent in 2016, coming behind XXL, G-Sport, Sport 1, Stadion and Intersport. A chart compiled by Sportsbransjen indicates that XXL last year overtook Gresvig, which operates the local G-Sport and Intersport chains. They were followed by Sport 1, Stadion, Coop and MX Sport.
MX Sport's retail sales fell by 7.8 percent to NOK 990 million (€104.8m-$120.7m) in 2016, and they fell at an even faster rate of 18.7 percent last year, down to NOK 643.9 million (€67.9m-$78.3m), following the establishment of Sport Norge.
